Book Review : Cloud Charts: Trading Success with the Ichimoku Technique by David Linton

David Linton’s Cloud Charts provides a good introduction for new traders seeking to learn more about Ichimoku (or Cloud Charts).

It is divided into 3 sections with a total of 16 chapters.

The first section (comprising of 7 chapters) deals with general Technical Analysis

The second section (comprising of 5 chapters) introduces the reader to Ichimoku

The last section (comprising of 3 chapters) discuss more about Advanced Cloud Chart Techniques.

For the experienced traders, it is possible to skip the first 7 chapters and head straight to the second section where it introduces the Ichimoku indicators, the constructions of the chart and the various signals for trading.

In my opinion, the author (David Linton) is able to depicts pretty clearly on the construction of the charts; how various Ichimoku indicators are constructed and how it is represented on Ichimoku.

As a trader, there are times where we choose to neglect the construction of the indicators. On hindsight, I am glad that the chapters reinforce my understanding of the charts and its possible implications when I am looking for support/resistance and the possible change in trend.

One important aspect of Ichimoku charts is the use of colours to differentiate different ‘moving averages’ and the change in cloud direction (or kumo twist). The book did not fall short in this area with all the charts in colour.

I believe this is an important part of Ichimoku. If the charts are in black and white, it would have fall short on the visual display and its ability to explain Ichimoku easily.

This book is not without negatives.

Like the book from Nicole Elliot, I find that it falls short in its explanation of ‘wave’, and ‘timeframe’ analysis.

In the chapter, Japanese Patterns Techniques, there are a few references to Hidenobu Sasaki’s book. However, it is not able to go beyond that and highlight how a trader can benefit from it.

In the last section, the author attempts to mix Ichimoku with other indicators. It could have been improved by providing more in-depth examples and walking the reader through how a trade is executed. For example, a more detailed discussion on the setup of the trade and how at trader will anticipate the trade as it breakout while observing its interaction with other indicators will be more useful.

For traders new to Ichimoku, this book will be a good introduction. However, I do not think it will be the ‘definitive’ guide.